Arm Reports Strong Q2 Results, Exceeding Expectations

A Letter to Arm Shareholders

Signed by the CEO and CFO, a letter has been released reporting on Arm's calendar Q3 (fiscal Q2) performance, marking the first quarter since its return to the public equity market.

Summary of Performance

The summary highlights that Arm's revenue has increased by 28% year-over-year, surpassing $800 million for the first time. This better-than-expected revenue growth can be attributed to the signing of multiple high-value long-term license agreements with industry-leading technology companies. Additionally, royalty revenue has benefited from market share gains and higher royalty rates.

The immediate demand for companies to invest in Artificial Intelligence (AI) across all end markets has played a significant role in driving license revenue up by 106% year-over-year. Furthermore, the ongoing need for power-efficient solutions in infrastructure and automotive sectors has continued to fuel double-digit royalty growth in those markets.

Arm's non-GAAP operating profit has seen a remarkable increase of 92% year-over-year, reaching $381 million. This has resulted in a non-GAAP operating margin of 47.3%.

Letter Excerpt

The full text of the letter can be found below:

"Dear Arm Shareholders,

We are pleased to report on Arm's performance for calendar Q3 (fiscal Q2) since our return to the public equity market. We have achieved significant milestones and are excited to share the following highlights:

- Revenue has increased by 28% year-over-year, surpassing $800 million for the first time. This exceptional growth can be attributed to the signing of multiple high-value long-term license agreements with industry-leading technology companies. Additionally, our royalty revenue has benefited from market share gains and higher royalty rates.

- The demand for Artificial Intelligence (AI) across all end markets has been instrumental in driving license revenue up by 106% year-over-year. This trend reflects the immediate need for companies to invest in AI technologies.

- The requirement for power-efficient solutions in infrastructure and automotive sectors has continued to drive double-digit royalty growth in those markets. We are proud to provide innovative solutions that meet these demands.

- Our non-GAAP operating profit has increased by an impressive 92% year-over-year, reaching $381 million. This achievement has resulted in a non-GAAP operating margin of 47.3%.

We would like to express our gratitude to our shareholders for their continued support. Arm remains committed to delivering cutting-edge technology and driving growth in the industry.

Thank you,

CEO and CFO of Arm"